I almost feel like the game is made scarier by the level of graphics. They're detailed enough to represent what they need to, but not good enough to fully do the job, so your mind wanders and fills in the blanks; making it scary to you specifically.
Great review, this is probably the one series that I've wanted to play for the longest time but am too chicken to actually play. Saw silent hill 1 being played when I was younger just after it came out for an hour or so and got creeped the hell out. Needs to be done one day tho.